Skip to content
Set Up a Consultation Call 770-594-8309 / Text 678-522-4799

How Does Bankruptcy Affect Your Divorce?

Filing for bankruptcy during your divorce proceedings does impact the progression of your divorce, at least to some degree. A bankruptcy filing does not stop things like child custody, visitation, and child support from being ordered by the judge in your divorce case. However, filing for bankruptcy will stop the division of your debts and assets during your divorce proceedings. The divorce court will not be able to take any further action with respect to your assets and debts until the bankruptcy proceedings have concluded.

A bankruptcy filing results in the bankruptcy court issuing an order that prevents your creditors from taking further action against you to collect debts. This order, which is known as the “automatic stay,” also prevents the divorce court from proceeding with the division of your marital assets and debts, whether you and your spouse have decided how to divide them up or not.

All of the property that you own, including any marital property, becomes the property of your bankruptcy estate when you file for bankruptcy. This means that any of this property can be subject to liquidation by the bankruptcy court. In other words, the bankruptcy court can order that your property be sold and the proceeds from the sale applied to your outstanding debts.

Whether you should file for bankruptcy while you are in the midst of a Georgia divorce depends on a number of factors, including how much property you have, how much debt you owe, and what type of bankruptcy you wish to file. If you and your spouse file a joint bankruptcy under Chapter 7 of the U.S. Bankruptcy Code, for instance, you may be able to greatly simplify the property and debt division portion of your divorce by discharging all eligible debts. Even if you file Chapter 7 bankruptcy on your own, you can eliminate your responsibility for certain marital debts.

Filing for bankruptcy during your divorce may be advantageous to you, particularly if you and your spouse have a significant amount of debts and few assets. Otherwise, it can be a very lengthy and costly process for the court to decide how to divide your debts and assets. Even then, if your spouse is ordered to assume responsibility for some of your debts, you may still be on the hook for them if your spouse later fails to pay those debts. If it is a joint debt, your creditor will still pursue you for the unpaid debt, even if your divorce decree says that your spouse is solely responsible for it. In this type of situation, bankruptcy may be the best choice for you.

For more information about how bankruptcy may affect your divorce proceedings, talk to the Atlanta divorce lawyer who knows how to handle your case in a way that will be most beneficial to you. Contact us or call today to learn how Shaw Law can work with you to achieve the best outcome possible for you and your children.

Scott Shaw is founder and principle of Shaw Law Firm LLC, founded in 1995 and dedicated solely to divorce, family law and child custody matters that must be addressed and decided in the state of Georgia. Shaw Law Firm serves the greater Metro Atlanta area, particularly the counties of Fulton, Gwinnett, Cobb, Cherokee, Forsyth, Paulding, Henry, Fayette, Coweta, Newton, Walton, Bartow and Douglas. Schedule a consultation today at 770-594-8309.